No, the PS3 will have Blu Ray as the standard drive. No seperate SKU's, well, at least not for a non-Blu Ray model.

So what if it's cheaper then a stand alone Blu Ray player? Do many home theatre enthusiasts actually use an Xbox or PS2 as their DVD player? No. If Blu Ray is good, then the PS3 creates a user base and demand for the product. If people like the tech, then they'll eventually buy a standalone player. I'm guessing 95% of the people who would buy a PS3 on day one, would not buy a dedicated Blu Ray drive on day one. I think it's safe to say many people are hesitant to back either HD DVD or Blu Ray since nobody wants the next Betamax. I know I won't be buying either until one format is the winner. But if my PS3 can play Blu Ray movies, well I might just start buying some HD movies afterall.

Consoles are always about selling hardware at a loss. If the PS3 does end up stealing some Blu Ray player sales at the start, it will be worth it in the end to have a much larger Blu Ray market. Think about it, if all those PS3 owners already have a Blu Ray film library, which format will they back? And then which format will they eventually buy a dedicated player from?

Look at it this way - your CD drive on your PC - it never moves, right? Have you ever had any problems with scratched discs? I'm guessing no.

A console however, can be bumped into/jolted around for any number of reasons. And when a disc is spinning 12 times (or whatever the standard reading speed is) normal, any slight jolt will cause the CD head to hit the disc.

Not a problem with my laptop though. Of course it was designed to move while operating whereas the X360 probably wasn't.